In his first two years in office, Clinton turned away from some of the social and economic policies of the Reagan and Bush years. He appointed several blacks and women to his cabinet, including Janet Reno, the first female attorney general, and named two supporters of abortion rights, Ruth Bader Ginsburg and Stephen Breyer, to the Supreme Court. He modified the military’s strict ban on gay soldiers, instituting a “don’t ask, don’t tell” policy by which officers would not seek out gays for dismissal from the armed forces. His first budget raised taxes on the wealthy and significantly expanded the Earned Income Tax Credit (EITC)—a cash payment for low-income workers begun during the Ford administration. The most effective antipoverty policy since the Great Society, the EITC raised more than 4 million Americans, half of them children, above the poverty line during Clinton’s presidency.
Clinton shared his predecessor’s passion for free trade. Despite strong opposition from unions and environmentalists, he obtained congressional approval in 1993 of the North American Free Trade Agreement (NAFTA), a treaty negotiated by Bush that created a free-trade zone consisting of Canada, Mexico, and the United States.
The major policy initiative of Clinton’s first term was a plan devised by a panel headed by his wife, Hillary, a lawyer who had pursued an independent career after their marriage, to address the rising cost of health care and the increasing number of Americans who lacked health insurance. In Canada and western Europe, governments provided universal medical coverage. The United States had the world’s most advanced medical technology and a woefully incomplete system of health insurance. The Great Society had provided coverage for the elderly and poor through the Medicare and Medicaid programs. Many employers offered health insurance to their workers. But tens of millions of Americans lacked any coverage at all. Beginning in the 1980s, moreover, businesses shifted their employees from individual doctors to health maintenance organizations (HMOs), which reduced costs by limiting physicians’ fees and, critics charged, denying patients needed medical procedures.
Announced with great fanfare by Hillary Rodham Clinton at congressional hearings in 1993, Clinton’s plan would have provided universal coverage through large groupings of organizations like the HMOs. Doctors and health insurance and drug companies attacked it vehemently, fearing government regulations that would limit reimbursement for medical procedures, insurance rates, and the price of drugs. Too complex to be easily understood by most voters, and vulnerable to criticism for further expanding the unpopular federal bureaucracy, the plan died in 1994. Nothing took its place. By 2008, some 50 million Americans, most of them persons who held full-time jobs, still lacked health insurance, meaning that illness could quickly become a financial disaster.